Indian equity markets ended
Friday's session marginally higher. Indices made a negative start of the day,
amid report that India Inc's growth engine slowed in the June quarter amid
sluggish demand across sectors and the base effect in the form of a strong
expansion in the year-ago period, reflecting the overall slowdown in the
economy. Sentiments remained lackluster with an another report stating that the
current economic slowdown can be attributed to a combination of structural
& cyclical factors, in addition to global uncertainties. It added that the
country's economy is showing signs of slowdown, with hi-frequency indicators
like industrial output posting subdued growth & automobile sales touching
historical lows. But, in the noon deals, markets staged recovery to settle the
day in green terrain, on account of firm cues from global markets. Traders got
relief, as the Central Board of Direct Taxes (CBDT) brought in concept of
Document Identification Number (DIN), taking further steps to ensure
transparency in Tax Administration. All
communications made by the tax department to assessees from October 1, 2019
will carry a computer-generated DIN in order to promote transparency. Some
support also came with the government data showing that India's merchandise
exports rebounded and grew 2.25% in July, aided by higher shipments of organic
goods, drugs and pharmaceuticals, while imports shrank, narrowing the trade
deficit. Finally, the BSE Sensex gained 38.80 points or 0.10% to 37,350.33,
while the CNX Nifty was up by 18.40 points or 0.17% to 11,047.80.
The US markets ended higher on
Friday with gains of over a percent each, amid optimism about the world's
central banks providing aggressive stimulus in order to prevent a global
recession. European Central Bank official Olli Rehn helped inspire confidence
after expressing the need for a significant easing package in September to
support the flagging eurozone economy. The expectations for more stimulus
contributed to a pullback by US treasuries and a subsequent increase in bond
yields. The yield on the benchmark ten-year note dropped below the two-year
yield on Wednesday, sparking fears of an impending recession and a sell-off on
Wall Street. Meanwhile, traders overlooked a report from the University of
Michigan showing a significant deterioration in US consumer sentiment in
August. The report said the consumer sentiment index tumbled to 92.1 in August
after inching up to 98.4 in July. Street had expected the index to dip to 97.2.
With the much steeper than expected drop, the consumer sentiment index slumped
to its lowest level since hitting 91.2 in January. The deterioration in
consumer sentiment came amid concerns about the proposed increase in tariffs on
Chinese imports as well as the reasoning behind the Federal Reserve's interest
rate cut. A separate report from the Commerce Department showed an unexpected
slump in housing starts in July but a sharper than expected increase in
building permits. The report said housing starts tumbled by 4.0 percent to an
annual rate of 1.191 million from the revised June estimate of 1.241 million.
Dow Jones Industrial Average jumped 306.62 points or 1.20 percent to 25886.01,
Nasdaq surged 129.38 points or 1.67 percent to 7895.99 and S&P 500 was up
by 41.08 points or 1.44 percent to 2888.68.
Crude oil futures ended higher on
Friday amid weakening demand against supply uncertainties linked to the Middle
East and OPEC production. Besides, recession fears faded a bit amid hopes
global central banks will announce further stimulus to revive economic growth.
Worries about energy demand outlook waned a bit with strong US retail sales
data (sales rose as much as 0.7% in July, the highest in four months) and
dovish comments from ECB's Rehn that signaled a significant easing package in
September to support the euro zone economy. Also, China's state planner said it
would roll out a plan to boost disposable income this year and in 2020.
Benchmark crude oil futures for September gained 40 cents or 0.7 percent to
settle at $54.87 a barrel on the New York Mercantile Exchange. October Brent
rose 41 cents or 0.7 percent to settle at $58.64 a barrel on London's
Intercontinental Exchange.
Indian
rupee strengthened for second consecutive session on Friday, on dollar selling
by exporters and banks. The rupee sentiment was buoyed with Commerce Secretary
Anup Wadhawan's report that exports growth of the country in the current fiscal
is likely to be in double digits despite the challenging situation both on the
external and internal fronts. He added in the last financial year, growth in
exports was between nine and 10% and the volume touched $331 billion.
Meanwhile, India's merchandise exports grew by 2.25 percent in July 2019 to
$26.33 billion as compared to same period of last year, on the back of higher
shipments of organic goods, drugs and pharmaceuticals. Trade deficit, gap
between imports and exports, narrowed to $13.43 billion in July from $18.63
billion a year ago, helped by lower oil import bill. However, dollar's
strengthen against some other currencies overseas along with rising crude oil
prices capped the gains. On the global front, dollar rallied on Friday, hitting
a two-week high against the euro as expectations for lower interest rates weighed
on the European currencies. Finally, the rupee ended at 71.14, 13 paise
stronger from its previous close of 71.27 on Wednesday.
The
FIIs as per Friday's data were net buyers in both equity and debt segments. In
equity segment, the gross buying was of Rs 7256.72 crore against gross selling
of Rs 5231.90 crore, while in the debt segment, the gross purchase was of Rs
2201.97 crore with gross sales of Rs 1741.06 crore. Besides, in the hybrid
segment, the gross buying was of Rs 10.58 crore against gross selling of Rs
4.84 crore.
The US markets ended in green on
Friday as a rebound in bond yields eased fears of a recession that sent stocks
tumbling earlier in the week. Asian markets are trading higher on Monday as
hopes of more stimulus from central banks around the world and steps being
taken by major economies such as Germany and China soothed investors' fears of
a sharp global economic slump. Indian markets ended choppy trading session in
green territory on Friday amid narrowing trade deficit and expectations the
government might soon provide a broad stimulus package to counter the economic
slowdown. Today, the Sensex and Nifty are likely to make a slightly positive
start of new week tracking firm global cues. Traders will be taking some
support with Union finance minister Nirmala Sitharaman's statement that her
officials are in discussions with their counterparts in the PMO and once the
talks are over, the government will figure out what remedial steps should be
taken and announce the same. Some support will also come with the Reserve Bank
of India's (RBI) data showing that India's foreign exchange reserves surged by
$1.620 billion to $430.572 billion in the week to August 9 on rise in foreign
currency assets. Traders may take note of Fitch Solutions' statement that the
RBI is expected to cut interest rates by 40 basis points before the end of the
current financial year as monetary easing till now appears to be insufficient
in boosting economic growth. However, continued selling by FPIs may cap gains.
Foreign investors pulled out Rs 8,319 crore on a net basis from capital markets
in the first half of August. Some cautiousness may come as the Australia and
New Zealand Banking Group (ANZ) slashed its forecast for India's economic
growth to 6.2% in the financial year ending next March from a previous estimate
of 6.5%, warning it would be tough for authorities to engineer a turnaround.
Sugar stocks will be in focus as the World Trade Organization's (WTO) dispute
settlement body has agreed to set up panel requested by Brazil, Australia and
Guatemala to review India's support measures for the sugar sector. There will
be some buzz in the aviation stocks with report that aviation watchdog DGCA is
looking at the option of introducing a new pilots training programme that will
focus more on competitive assessment rather than just fixed flying hours. There
will be some reaction in reality stocks with Fitch Ratings' report that with
non-bank financial companies (NBFCs) and housing finance companies becoming
risk averse towards lending to real-estate sector, developers are likely to
face a liquidity crisis. Meanwhile, Ujjivan Small Finance Bank has filed a
draft prospectus for Rs 1,200 crore initial public offer with market regulator
Securities and Exchange Board of India (SEBI).
Support and Resistance: NSE (Nifty) and BSE (Sensex)
Index
|
Previous close
|
Support
|
Resistance
|
NSE Nifty
|
11,047.80
|
10,958.52
|
11,102.87
|
BSE Sensex
|
37,350.33
|
37,068.34
|
37,538.38
|
Nifty Top volumes
Stock
|
Volume
|
Previous close (Rs)
|
Support (Rs)
|
Resistance (Rs)
|
(in Lacs)
|
Yes Bank
|
1,434.79
|
79.45
|
77.05
|
81.65
|
Indiabulls Housing Finance
|
358.39
|
550.75
|
511.67
|
576.17
|
Tata Motors
|
352.65
|
121.35
|
118.32
|
123.42
|
SBI
|
200.47
|
290.90
|
285.87
|
294.37
|
GAIL (India)
|
153.25
|
129.65
|
125.45
|
132.65
|
ONGC is investing around Rs 83,000 crore in 25 major projects to boost oil and gas production.
Coal India's 54 coal mining projects are facing delay due to various reasons such as contractual issues and delay in green clearances among others.
Dr. Reddy's Laboratories has received complete response letter from the USFDA for its versions of NuvaRing and Copaxone.
Bajaj Finance, the lending and investment arm of Bajaj Finserv is offering the Shoes Insurance policy for expensive footwear.